Inevitable: China Files WTO Dispute re: 22 US CVD Cases

As you may recall, when the United States passed a law in March 2012 overruling a couple federal court decisions and retroactively applying US law to scads of completed countervailing duty investigations of Chinese imports, I explained that the law's illogical, biased structure - in particular, not addressing WTO-inconsistent "double counting" in any case completed before the law's enactment - all but guaranteed at least one WTO challenge from the Chinese government because the WTO's Appellate Body (in DS379) had already ruled that a failure to fix the problem in several other cases violated WTO rules. (My conclusion: "Thus, there are 20 other cases and many duties that will remain artificially (illegally) high via double counting, and that could be - and very likely will be - challenged at the WTO.")

That first dispute, it appears, arrived today:

China has asked for consultations at the World Trade Organization's Dispute Settlement Body on countervailing duty measures applied by the U.S. against 22 Chinese products, including solar panels, a statement posted on the Commerce Ministry's website said Friday.

The measures also were related to paper and steel products and affected $7.29 billion of Chinese exports to the U.S., Commerce Ministry spokesman Shen Danyang said in the statement.

U.S. actions on subsidy calculations and in determining that China's export restrictions were "effectively a subsidy" are violations of WTO rules, Mr. Shen added....

"The U.S. practices are an abuse of the trade remedy mechanisms and have damaged the legitimate interests of Chinese companies," Mr. Shen said. "We are greatly dissatisfied with this."

Mr. Shen said China has reiterated its stance on many occasions, but the U.S. has ignored China's concerns and "repeated its improper methods in the recent solar panel case."...

"China is hoping that the U.S. will correct its mistaken actions in anti-subsidy investigations," Mr. Shen said, adding that Beijing also hopes the U.S. "will use positive talks and communication under the WTO dispute-resolution mechanism to return to practices that are in line with WTO rules."

If consultations fail to produce a solution, China may request a ruling by a WTO panel.
China's formal request for consultations isn't yet available on the WTO's website, but the WSJ article makes clear that China is challenging not only the United States' use of "double counting" in those CVD investigations, but also several other potential problems therein. BNA[$] adds that, according to the Chinese mission in Geneva, one of those issues is the US Commerce Department's treatment of Chinese state-owned enterprises as "public bodies" (i.e., as the Chinese government itself) in order to determine whether their sales of goods and services to targeted exporters constitute subsidies. As you may recall, the public body issue also was addressed in DS379, and the United States just informed the WTO that it published on May 18 a preliminary determination on public bodies in the "Section 129" determination that the Commerce Department is (delinquently) completing to comply with the Appellate Body's DS379 report.

I guess Commerce's May 18 determination wasn't what the Chinese Government was hoping for, eh?

Anyway, today's WTO dispute adds to the long string of litigation surrounding the United States' application of CVDs on imports from China and other "non-market economies." The US government recently had the opportunity to end much of this litigation, but instead doubled-down on the messy status quo when it passed the CVD/NME law in March and in the subsequent Section 129 proceedings. Since then, we've seen the law's constitutionality challenged in US court, and now China's back at the WTO complaining about, among other things, what the law didn't fix in 20-plus CVD investigations. Both of these legal reactions were completely expected, and pretty much ensure that US-China trade policy will be marred by an issue that (a) was easily solvable via one of several rational policy options; (b) keeps the US on the defensive in bilateral trade talks; and (c) increasingly looks to be putting American exports at risk via China's imposition of WTO-sanctioned retaliatory tariffs due to continued US malfeasance.

But other than that...This feed originates at the personal blog of Scott Lincicome (http://lincicome.blogspot.com).

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As you may recall, when the US government implemented a new law in March retroactively applying countervailing duties to imports from non-market economies (NMEs) like China and Vietnam, I opined that (contrary to what the staff on the House Ways & Means Committee were claiming)legal challenges in both US courts and the WTO were inevitable. The US court cases were quick to follow and a c

Yesterday, the WTO's Appellate Body delivered a pretty significant smackdown on the United States in its dispute with China over the US imposition of anti-dumping (AD) duties and countervailing duties (CVDs) on Chinese imports. The decision follows a string of losses by China at the WTO.

When Congress passed legislation in March to apply countervailing duties on imports from China and other countries deemed "non-market economies" under the US anti-dumping law, proponents like House Ways & Means Committee staff promised us that the bill would solve, once and for all, the problem of "double counting," and that we critics were peddling "myths" when we claimed that the law in no way ensured that the illegal practice would end. The CVD/

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Over the last year, I've been chronicling the ongoing legal drama surrounding the US law that retroactively authorizes the US Department of Commerce to apply countervailing duties on imports from "non-market economies" like China and Vietnam. Most of that drama has centered on the court case that first led to the CVD/NME law's implementation (GPX Int'l Tire Corp. v.

Late last week the Chinese government announced new anti-dumping and countervailing duty (anti-subsidy) investigations of US and Korean imports of polysilicon - a primary input for the production of solar panels.
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A little over two weeks ago, a WTO panel released its decision in a dispute between the US and China over the United States' imposition of antidumping and countervailing duties (CVDs) against imports from China. The ruling covers a lot of interesting and important US-China trade issues, including whether the simultaneous imposition of antidumping and countervailing duties against Chinese imports results in "double remedies" on those imports and whether such double counting violates WTO rules.